UK Training expenses for the self-employed

[Robvalue]

Hi there, I'm helping out a friend and I wanted to get some advice please to make sure I have things clear.

She is self-employed, and she will be going on some training which she is funding herself. It is relevant to her business, and she tells me it's a mixture of updating current skills and learning new skills.

My understanding is that this means it cannot be claimed as an expense, because the new skills are effectively an asset. Is this correct?

If she went on training that is solely updating her current skills, can this be claimed? My research indicated something about "capital allowance", which I'm not familiar with. Is this how it would be claimed, and if so, could anyone give me a link to a resource which explains how this would be recorded in the books?

Many thanks

Rob

 

[Yash]

Hi Rob, any training is an expense to the company. If she is running a business on her own and took training to develop the business then the economic benefit is flowing back to you in the form of profits.

 

[Yash]

Hi there, I'm helping out a friend and I wanted to get some advice please to make sure I have things clear.

She is self-employed, and she will be going on some training which she is funding herself. It is relevant to her business, and she tells me it's a mixture of updating current skills and learning new skills.

My understanding is that this means it cannot be claimed as an expense, because the new skills are effectively an asset. Is this correct?

If she went on training that is solely updating her current skills, can this be claimed? My research indicated something about "capital allowance", which I'm not familiar with. Is this how it would be claimed, and if so, could anyone give me a link to a resource which explains how this would be recorded in the books?

Many thanks

Rob

http://lansdellrose.co.uk/blog/tax-relief-training-cpd/

Call them and maybe they can clarify your doubt.

 

[Becky]

@Yash she is self-employed, there is no company

AFAIK training to update existing skills would be an allowable deduction as long as it is wholly & necessarily incurred for the purpose of the trade. Training for new skills would be capital, but it depends on what it is - if she's an artist and she trains as a dentist then that is definitely a new skill, but if it were learning about a different painting technique then it may be classed as just developing existing skills.

 

[Yash]

Thank you Becky.

 

[Robvalue]

Thank you everyone for the replies

@Yash she is self-employed, there is no company

AFAIK training to update existing skills would be an allowable deduction as long as it is wholly & necessarily incurred for the purpose of the trade. Training for new skills would be capital, but it depends on what it is - if she's an artist and she trains as a dentist then that is definitely a new skill, but if it were learning about a different painting technique then it may be classed as just developing existing skills.

Her business is dog training classes, and the courses are regarding various areas of dog expertise. From your example, it does sound closer to updating skills than learning new ones.

My research seemed to indicate that since she's sending herself on this training and is self-employed, it cannot be put down as an expense in the usual way, but has to go through this "capital allowance". Maybe I have got that wrong? Can she simply include "training" as another normal expense category, assuming she is only updating her skills?

(We'll assume too that it's wholly concerned with her business. I can appreciate that if it's at least partly for other reasons, it wouldn't count as an expense. This is something I'd have to clarify with her.)

 

[Becky]

Thank you everyone for the replies



Her business is dog training classes, and the courses are regarding various areas of dog expertise. From your example, it does sound closer to updating skills than learning new ones.

My research seemed to indicate that since she's sending herself on this training and is self-employed, it cannot be put down as an expense in the usual way, but has to go through this "capital allowance". Maybe I have got that wrong? Can she simply include "training" as another normal expense category, assuming she is only updating her skills?

(We'll assume too that it's wholly concerned with her business. I can appreciate that if it's at least partly for other reasons, it wouldn't count as an expense. This is something I'd have to clarify with her.)

As with most tax matters, sometimes it's not clear cut, but as long as you can justify your view then that counts for a lot. I would say that if the training relates to a continuation of her existing business, then I would have thought it would be a deductible expense. If she was branching out - for example, learning how to do dog grooming as a new service - then that seems more like capital.